Christian Fromhertz
CEO of Tribeca Trade Group, Momentum Trader, Ex-BAML ETF Director
US regional banks are among the underowned, lower-volatility areas now ripping, driven partly by earnings and an overall rotation. Alongside transports, medical devices and homebuilders, they are drawing money as overcrowded, highly margined, growth-at-any-cost areas such as semiconductors are unwound. x.comÂ
US consumer cyclicals and broad market breadth look set to gain as Q2 bank results refute the K-shaped consumer doom thesis. Card spending rose 9% to 12% at JPMorgan, Bank of America, Citi and Wells Fargo while credit quality improved: JPMorgan's card net charge-off rate fell to 3.34% from 3.47% and it cut full-year guidance, and Wells Fargo's credit-loss provision fell 9%. With rate tailwinds and falling gas, retail, transports, regional banks and equal-weight stocks signal a cyclical rotation. … Show more
Bank stocks look buyable if systematic selling is reacting to a flatter yield curve: the front end that drives earnings has barely moved. JPMorgan and Citi card spending rose 10% and 13%, and Citi and Wells Fargo reported lower credit losses. Wells expects steady margins and improving interest income as loans grow and old fixed-rate assets roll into higher yields. Funds crowded into banks before results, limiting near-term buyers. x.comÂ
Regional banks rejected a double top at their 4Q21-1Q22 peak, and pumping them now is market foolishness. Rising yields, falling high-yield and investment-grade corporate bonds, and collapsing real estate all argue against owning them. x.comÂ
US regional banks look like a long as yields should be near a peak, with bonds and regional banks both halting their slide today. The trade rests mostly on a five-step long signal: price closed a gap, held the 50-day line, and indicators look similar to the March bottom. x.comÂ
Regional bank stocks will turn when bonds turn, with a target of 110 for the SPDR S&P Regional Banking ETF from around 68. The turn could happen any day, but the move to 110 should play out over several months, and focusing on day-to-day moves misses that. x.com x.comÂ
Big banks' negative earnings reactions leave regional banks looking likely to continue lower. Regionals were a leading bear sector in many previous negative markets, including the 2025 bear market and the early-2023 regional banking crisis. x.comÂ
Banks and XLF look to have bottomed this past week, supporting a local bottom in US small caps. Stockspy1 noted that the Russell 2000 includes many regional banks, linking the banking-sector turn to IWM. x.comÂ
Lower expenses, taxes and provisions, management changes and another asset sale support Truist's turnaround, which is just beginning under its new CEO at 1x book. The quarter was mixed, but the most impressive figure is 16-18% ROTCE, similar to Wells Fargo. x.comÂ
Regional banks are next in line as commercial real estate cracks, because they hold a massive share of CRE loans that go bad as property values crater. Private credit cracked first: Apollo, Ares, Barings, Morgan Stanley and Cliffwater capped redemptions, and Apollo's co-president said some private-market marks are wrong. Now buildings sell for up to 90% off; a Chicago office bought for $68.1M fetched $4M. As loans mature and refinancing bites, every forced sale resets prices for everyone. x.com … Show more
Berkshire Hathaway is starting a breakout as the summer rotation out of tech into value begins, and its record cash pile was a loaded gun waiting for this moment. After two years going sideways, the chart is coiled at the top of a five-year run. Rotation is a healthy breather before the next leg: value leads through October while tech rests, then both push together toward the S&P 500 at 10,000 and Nasdaq 100 at 40,000 by 2028. x.comÂ
